With home prices shooting up in the last decade and especially since COVID, many are turning to alternative paths to homeownership. These include tiny homes as well as manufactured homes, both of which provide fewer financial barriers to entry. Today, we’re going to take a look at manufactured homes — and how you can purchase one for less and then convert it to a traditional stick-built home on a foundation later on.
What are manufactured homes — and what is the difference between manufactured homes and stick-built?
These aren’t the only two types of home builds, but they are two of the most common.
Stick-built homes are built the traditional way, where the builder brings materials on-site and then assembles it from there. A manufactured home, on the other hand, is put together away from the housing site in a factory, and from there, it’s transported to the lot and placed on the foundation.
A manufactured home can be attached to a permanent foundation and be classified as a standard real property, or it can be placed on a temporary foundation. In that case, the home is classified differently as personal property, just like a mobile home or other large belongings.
Manufactured homes follow a standardized pattern, meaning they take less time to plan, the components are quicker to get ready, and they take less time to construct.
Although this sounds appealing, there are legitimate benefits to a conventional stick-built home that motivates many to convert this manufactured home into a stick-built home. Here’s why:
The benefits of a stick-built home on a permanent foundation
While a manufactured home is more financially feasible during the building process, a conventional stick-built home actually has more financial benefits once built.
These generally come down to the different classifications each receives; manufactured homes are classified as personal property, versus the real property — AKA realty or real estate — that conventional homes are considered. There are a lot of implications originating from this.
First off, conventional stick-built homes have a lot more flexibility in how you can finance one compared to manufactured homes. And there are significant tax and assessment implications here too.
Manufactured homes are taxed at a higher rate because of their classification as personal property, similar to vehicles; stick-built homes come with tax benefits due to their permanence that isn’t available to manufactured ones.
Additionally, your home value will appreciate more on a permanent foundation with a stick-built home. While this could lead to a higher amount of taxes payable as your home is assessed that it’s worth more, you’re still likely to save on taxes due to the lower tax rate, plus now your stick-built home is worth more if you decide to sell it in the future.
Converting your previously manufactured home into a custom stick-built home
People will occasionally ask us if it’s possible to customize a manufactured home, and the answer is yes. At Reality Homes, we’re able to convert a manufactured home after it’s built to turn it into a more conventional stick-built custom home that turns it from personal to real property.
During the process of converting your manufactured home to a custom stick-built home, there are multiple checkpoints. The first one, considering and deciding if this is the right move for you. And the second one is, the cost of materials and their availability and how that will affect your budget and timeline.
Once you’ve decided on that, the next step is to check the home’s HUD certification to ensure it passes the Department of Housing and Urban Development’s building standards. At the same time, you’ll have to make sure this conversion to a stick-built custom home is allowed within your local zoning regulations and that you have the right permits. After that, you can begin on the foundation, from building it to preparing your home to be attached. Working with Reality Homes Inc. will save you a lot of time and effort and will make this process more streamlined.
Also, depending on your manufactured home’s setup, it could have certain mobility-related details like a hitch or axle — these will of course be removed during this step.
Similar to your HUD certification, utilities also need to be approved by your county to make sure they’re code-compliant. This means electricity, plumbing, water, and, if applicable, landlines confirmed by the official specialists who are familiar with the existing utility line infrastructure.
Lastly, you’ll need your location to be certified. This is done by a land surveyor, who will create an official document certifying your location and permanence, confirming this home is now eligible to be considered real estate instead of personal property and that it complies with all the zoning regulations for permanent structures.
In the end, there are pros and cons to both manufactured homes and more conventional stick-built ones, but more pros for a stick-built home than the latter. In this case, work with Reality Homes Inc. We can build your dream home and match the changes of your lifestyle and financial status.
